What Is a Joint Bank Account and Is It Right for You? (2024)

Combining finances can help people in many relationships spend, save and manage money more efficiently

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A joint bank account generally works like any other checking or savings account. The difference is that two people—married or unmarried partners, parent and child, senior and caregiver—own the account and both have full control over it. That means each account owner can obtain a debit card, make purchases, may be able to write checks and make deposits and withdrawals—all with or without the other’s consent.

What Is a Joint Bank Account and Is It Right for You? (1)

What Is a Joint Bank Account and Is It Right for You? (2)

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What are advantages of a joint bank account?

The main benefit of a joint bank account is that it makes your financial life easier. You can reduce the time, cost and hassle of paying bills by sharing household expenses such as mortgages, car payments, utilities and groceries. You can also save toward shared goals, such as a new home or a vacation.

Withdrawing cash and making online payments from one account also allows you to budget your money together. When you can both see your account activity, you might be less tempted to splurge or make secret purchases.

What Is a Joint Bank Account and Is It Right for You? (4)

Did you know?

Pooling your money in a joint account might also help you meet minimum balance requirements, which may in turn qualify you for a waiver on maintenance fees, along with benefits such as higher interest rates and other rewards.

What are disadvantages of a joint bank account?

Some people feel more comfortable keeping individual accounts. And it can be stressful to a relationship if joint bank account owners have different spending habits or financial circ*mstances—for example, if one owner is carrying a lot of debt or has mismanaged money in the past. In those cases, separate accounts can make sense, at least until you’re on a firmer financial footing.

Additionally, third parties such as the IRS may take funds from a joint account to cover debt owed by one of the individuals. And remember that co-owners of a joint bank account can have access to and withdraw funds, and discuss the account with bank representatives, without the other’s permission.

Pros and cons of a joint bank account

Pros

Simplifies bill paying

Makes monitoring spending easier

Fosters shared decision making

Cons

Reduces individual privacy

Allows withdrawals without joint consent

Subjects full balance to creditors

How to open a joint bank account

Accounts can be opened in person at a branch office or online, depending on the bank you choose. If you plan to do it in person, both account holders will need to be present.

Regardless of where or how you open your account, you’ll need to provide basic identification: driver’s licenses, state IDs or passports. You’ll also be asked for personal information, including dates of birth, Social Security numbers and current address.

In setting up your account, you can decide how to manage and monitor it, including signing up for online banking and receiving account alerts (for one or both of you). You can also choose whether you’ll set up shared or individual online banking profiles.

What Is a Joint Bank Account and Is It Right for You? (5)

What Is a Joint Bank Account and Is It Right for You? (6)

How to close a joint bank account

There are a variety of reasons—the end of a relationship, divorce, a death in the family, a mutual decision to change banks—you might not want to keep your joint account open. Generally, one account holder can make that choice, though some banks require consent from both parties. Check your account agreement for details.

You should withdraw or transfer all money from the account before closing it. It’s also a good practice to open another bank account or have one open already, so that you can easily transfer funds.

If the joint account is with an online bank, each account holder may need to enter sign-in credentials and approve the closure. And you may need to provide identification, like a driver’s license, state ID or passport.

What Is a Joint Bank Account and Is It Right for You? (7)

Did you know?

You usually cannot remove a person from a joint account without that person’s consent. However, in most cases you can close the account without their consent.

What about a linked account instead of a joint account?

For some people, linked accounts offer a middle ground between the joint and individual options. This kind of account allows you to easily make transfers among accounts, so you can coordinate savings and bill paying without granting the other party full access to your individual accounts.

Many people link checking and savings accounts at the same bank, but you can do so at different financial institutions. To do that, you’ll need to provide the following information:

Bank name

Bank’s city and state

ABA routing number

Account number

What Is a Joint Bank Account and Is It Right for You? (8)

Quick tip

A common strategy is to open a joint account as well as keeping separate accounts, then link them all. That allows you to maintain independent control of your individual finances while sharing a joint account for mutual savings and expenses.

A joint banking account is built on trust. Make sure you have honest—and ongoing—discussions about finances with the partner, family member or friend you share the account with. Those conversations can help your joint account become the cornerstone of a successful and enduring financial partnership.

Disclaimer

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The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America Corporation and/or its affiliates assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment management. ©2024 Bank of America Corporation.

What Is a Joint Bank Account and Is It Right for You? (2024)

FAQs

What is joint account answer? ›

A joint account is a bank or brokerage account shared by two or more individuals. Joint account holders have equal access to funds but also share equal responsibility for any fees or charges incurred. Transactions conducted through a joint account may require the signature of all parties or just one.

Is it a good idea to have a joint bank account? ›

Having a joint bank account can help couples work together on finances and money goals. Keeping separate accounts might work better if you and your partner have very different money management styles. Holding a joint account as well as individual accounts might be the best solution for some.

What are the rights of a joint checking account? ›

The money in joint accounts belongs to both owners. Either person can withdraw or spend the money at will — even if they weren't the one to deposit the funds. The bank makes no distinction between money deposited by one person or the other, making a joint account useful for handling shared expenses.

What are the disadvantages of joint account? ›

Drawbacks:
  • Shared Responsibility: Joint accounts require a high level of trust and financial responsibility. ...
  • Ownership and Liability: Both account holders are equally liable for any overdrafts, debts, or liabilities associated with the account. ...
  • Privacy Concerns: Joint accounts lack privacy.
Sep 27, 2023

How does a joint bank account work? ›

Owning a joint bank account means all owners have the ability to make deposits into the account. Regardless of how much they contribute to the balance, each party also has full access to any funds in the account, as well as the ability to see any recorded transactions made by the other individual.

Can you still withdraw money from a joint account if one person dies? ›

Joint bank accounts

If one dies, all the money will go to the surviving partner without the need for probate or letters of administration. The bank may need the see the death certificate in order to transfer the money to the other joint owner.

Who owns the money in a joint bank account? ›

Both owners of a joint bank account own the money in it equally. That means you have the ability to deposit and withdraw funds as you wish – and so does the joint account holder. Since both people have equal ownership and access to the money, it's important to set boundaries regarding how the account will be used.

Who owns a joint account when one person dies? ›

Joint bank account holders generally have the right of survivorship, which grants the surviving account holder ownership of the entire account balance. The surviving account holder retains ownership regardless of which owner contributed the money, and the account doesn't go through the probate process.

What are the risks of opening a joint bank account? ›

Equal Responsibility: A joint banking account puts all co-owners on the hook for any overdrafts or issues associated with the account. This means the account assets are open for seizing to creditors, liens, and lawsuits if other co-owners get into financial or legal troubles.

Can they seize a joint bank account? ›

Creditors can garnish jointly owned savings and checking accounts. Learn about your rights. Creditors might be able to garnish a bank account (also referred to as "levying" the funds in a bank account) that you own jointly with someone else who isn't your spouse.

Who has control in a joint account? ›

The difference is that two people—married or unmarried partners, parent and child, senior and caregiver—own the account and both have full control over it.

Can my wife empty your joint account? ›

If the funds in your joint bank account are considered separate property and owned exclusively by your spouse, they may legally be able to drain the account. Similarly, even if the account is community property, a spouse may be able to withdraw money for reasonable living expenses, legal fees, and children's expenses.

Do I have to pay taxes on a joint bank account? ›

Who Pays Taxes on Interest From a Joint Bank Account? If you have a joint account, you both may have to pay taxes on a portion of the interest income. However, the bank will only send one 1099-INT tax form. You can ask the bank who will receive the form because that person has to list the income on their tax return.

What are the legal issues with joint accounts? ›

If the joint account earns interest, you may be held liable for the income produced on the account in proportion to your ownership share. Also any withdrawals exceeding $14,000 per year by a joint account holder (other than your spouse) may be treated as a gift by the IRS. This may subject you to gift tax.

How much money is protected in a joint bank account? ›

You get up to £170,000 protected in a joint account

It's simply the same protection as if each account holder had a separate account. The best way to work out the protection that applies is to know that the FSCS considers that half the money in the account belongs to each person. An example should help...

What is a joint account quizlet? ›

Joint account. two or more adults are named on the account as co-owner, with each allowed some form of control over the account.

What is a joint name account? ›

A joint account lets you share money with someone you trust. You'll both be able to manage the account, including making payments and paying bills.

What is the purpose of a joint account? ›

Holding a joint account makes it easier for family members in different cities to share and access funds. A joint account is a simple way to keep track of your and your family's finances. Most banks also offer additional benefits on joint accounts, such as debit cards and cheque books for each holder.

What is an example of a joint account holder? ›

Joint accounts are common for married couples or family members, such as a parent and a child. Either individual can also add authorized users to the account. Both joint account holders share the responsibility for all charges made by each other and by any authorized users.

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